A Massachusetts think-tank on Thursday released a report that says zoning rules that require the inclusion of affordable housing units are needed to prevent “housing segregation” in cities undergoing development booms.

However, the report, released by the Lincoln Institute of Land Policy, says those rules — often referred to as inclusionary zoning — need to be carefully drafted to survive a court challenge. It also says cities must follow-up with developers to ensure that housing remains affordable after such ordinances are adopted.

Read the report

Third Square, a new apartment building in Cambridge, Massachusetts,
set aside 56 units to be permanently affordable to lower-income renters. Lincoln Institute of Land Policy/City of Cambridge

“In hot-market cities, skyrocketing housing prices push middle class and low income residents far away from well-paying jobs, reliable transportation, good schools and safe neighborhoods,” said Lincoln Institute President George W. “Mac” McCarthy. “Inclusionary housing alone will not solve our housing crisis, but it is one of the few bulwarks we have against the effects of gentrification—and, only if we preserve the units that we work so hard to create.”

More than 500 communities have adopted inclusionary zoning ordinances, according to the Lincoln Institute of Land Policy, which bills itself as the leading resource concerning use, regulation and taxation of land. The city of Portland is now considering such an ordinance in the face of rapidly rising rents, and opponents have argued that it could backfire by slowing investment in needed housing development..

The institute’s report, “Inclusionary Housing: Creating and Maintaining Equitable Communities,” says that such ordinances can be adopted while avoiding negative economic impacts and legal challenges by offering incentives, such as building at greater densities.

The report, which looked at case studies throughout the U.S., claims that inclusionary zoning rules don’t drive up market-rate prices citywide, but an ill-conceived ordinance could discourage development.

“It is entirely reasonable to ask real estate developers to help address the pressing need for more affordable housing, because developers and landowners benefit financially from the conditions that give rise to the shortage of decent, well-located homes for lower-income residents,” the report states. “But inclusionary programs need to be designed with care to ensure that their requirements are economically feasible.”

After more than a decade of stagnant development, Portland is experiencing a wave of market rate housing projects, especially downtown, as well several projects that are intended to accommodate low-income families. That is pushing many middle class families out of the city, according to a recent report by the Greater Portland Council of Governments.

A strong demand for housing in Maine’s largest and arguably most progressive city coupled with a limited housing supply is driving up rents faster than most U.S. communities. Rents jumped 17.4 percent from May 2014 to May 2015 — the second highest rate in the country behind Jackson, Mississippi, according to the real estate data firm Zillow.

To address the shortage of middle-class housing options, the city has deliberately sought proposals for so-called workforce housing on a city-owned site in the Bayside neighborhood.

The City Council is also considering adopting an inclusionary zoning ordinance. Even though the proposed ordinance received a negative recommendation from the Planning Board, several councilors continue to support the proposal, which they will take up at a meeting in October.

The ordinance has faced opposition from the Portland Community Chamber of Commerce and private developers, who warn about unintended consequences. They argue that requiring developments to include affordable units will inevitably drive up the prices of the remaining market-rate units.

As proposed, the ordinance would require developments with 10 units or more to set aside at least 10 percent of the units for people making 100-120 percent of the area median income or lower. Currently, that threshold is $77,500 to $96,875 for a family of four, according to the city.

Developers that comply would be eligible for a 25 percent increase in housing density and be considered for local tax credits.

The developer could get around that requirement by paying $100,000 per unit into the city’s Housing Trust fund.

The Lincoln Institutes’s report also found that: rapid construction of market rate housing actually fuels the need for more affordable housing; successful policies have been built with input from both private development and public officials; flexibility and incentives are needed; inclusionary zoning ordinances have been challenged in court and can be designed to minimize legal risk; follow-up enforcement and stewardship are needed.

The Lincoln Institute of Land Policy was founded in 1946 by John C. Lincoln, a Cleveland industrialist and investor who admired the writings of Henry George, a late 19th century economic philosopher who advocated for a single tax on unimproved land to fund all governmental operations, while abolishing all other taxes as a way of achieve economic equality and social justice.

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BruceLIbby

Other words he social engineering is used to limit your freedom.
Soon you will be told that empty land down the street will have to have low income housing on it . You people have had long enough to choose where you want live, government will do it for you and determine who will live where.
What can go wrong it has worked so well in past.

Diebenkorn

The rich have always had and will continue to have all the choices they want. It’s the middle class and poor that are being priced out, so I’m sure sure they won’t give a damn where the apartment is, as long as it’s affordable.

knuckledragger

Actually a lot of the middle class has moved to surrounding bedroom communities to Portland so most of the residents are either rich or poor now since the poor get subsidies and the rich don’t need subsudies

Diebenkorn

And that is the problem – urban sprawl. It’s a very inefficient and ecologically damaging use of resources to create suburbs on 2 acre house lots – it’s an outdated 1950’s design. The trend today is that people are moving back into urban areas so if Portland wants grow we need to be inclusive and provide housing for all income levels.

Thomas Mickey Creeley

Well said

BruceLIbby

So we are to settle for he government determining where and on how much land we should have.
Urban Sprawl? Go to Topsham , Maine head North on Rt 201
To 295 overpass in Gardiner ,Me. Them Tell me about urban Sprawl. There less sprawl there now then 5o years ago.

Diebenkorn

The discussion is regarding Portland. Look at SoPo, Falmouth, Westbrook, Gorham and even Buxton and Yarmouth. Cheek by jowl in many areas.

BruceLIbby

Right let’s ignore the rest of the state where sprawl isn’t an issue.

reed1v

It already does, has for a long time. Called zoning, comprehensive planning, and building regulations.

BruceLIbby

Yes, but what lays ahead is and will take over aspects of zoning. Remember what is in zoning i ultimately approved by the people ,what lays ahead will remove that approval in some
cases.

reed1v

Good point. Yes we are headed to a national zoning era and perhaps a national determination as to where and with whom folks live.

BruceLIbby

And it will be called something but its’ real name will be desegregating a town or area because someone in DC will determine they do not like the makeup of your community.

BruceLIbby

Shakesphere was wrong ,the planners should be the first to go!

knuckledragger

Not true I live on 5 acres and have a vegetable garden and solar panels and probably use a lot less resource’s then a lot of the people in Portland. My wife is also a virtual employee so she doesn’t have to commute

Diebenkorn

The exception doesn’t make the rule. I’m sure the millions of people stuck in traffic jams commuting to work every day would envy your lifestyle.

AliceOfForethought

oh my goodness! you might have to live near poor people! I feel terrible for you. really.

reed1v

Yes, crime, grime, and noise are such nice things to have in one’s neighborhood.